Will the distribution affect the fund’s credit rating or borrowing capacity, if any?

Impact on credit rating / borrowing capacity

The Section 19(a) notice simply confirms the fund’s ability to make its scheduled distribution; it does not represent a new debt issuance, covenant change or credit‑rating event. The fund’s current distribution—10.5 % (price‑based) and 9.6 % (NAV‑based)—is a cash‑flow outlay that the fund’s board has already accounted for in its liquidity planning. Because the fund’s capital structure and collateral (the underlying infrastructure assets) remain unchanged, the distribution itself is unlikely to trigger a rating downgrade or materially alter borrowing capacity. Rating agencies focus on the fund’s asset‑backed cash‑flow profile, leverage ratios, and covenant compliance; a routine distribution, especially one already reflected in the fund’s cash‑reserve calculations, typically has no material effect on those metrics.

Trading implications

The high distribution yield is attractive to income‑focused investors and can support the share price in the short term, especially if the underlying asset pool remains stable. However, a high payout rate can erode capital reserves if the fund’s earnings fall short of expectations, potentially raising credit‑risk concerns over a longer horizon. Traders should monitor: (1) the fund’s leverage and cash‑reserve metrics in its quarterly reports, (2) any rating agency commentary for signs of watch‑list activity, and (3) the price‑vs‑NAV spread (currently ~‑8 % relative to NAV). A narrowing spread or a rise in credit‑spread cost could signal that the high distribution is starting to stress the fund’s balance sheet. In practice, maintain a net‑long position only if you see stable asset‑level cash flows and no signs of rating pressure; otherwise, a cautious, short‑term trade aligned with the dividend‑capture calendar is more appropriate.